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Tadmor Levy & Co updates

Parliament recently passed the Advancement of Competition in the Food Sector Law. According to the law's explanatory notes, its main objective is to increase competitiveness in the food sector in order to reduce product prices for consumers. While this objective is noble, it is unclear whether the law will appropriately and effectively achieve it.

The Antitrust Authority recently published its Draft Guidelines on the Prohibition on Excessive Pricing by a Monopoly, reflecting a significant change in the authority's interpretation of the Restrictive Trade Practices Law. The antitrust commissioner has stated for the first time that charging excessive prices is deemed unfair pricing, and subsequently that this practice is deemed an abuse of a monopoly position.

The Antitrust Authority recently published a new block exemption that significantly reforms the supervision of restrictive arrangements in Israel. Going forward, ancillary restraints in vertical arrangements (except for minimum or fixed resale price maintenance) no longer require the prior approval of the Antitrust Tribunal or the antitrust commissioner, provided that such arrangement does not significantly harm competition.

The Antitrust Authority recently published draft guidelines for conducting due diligence in transactions that require the transfer of sensitive information. The guidelines confer ultimate discretion regarding the due diligence process - and the potential liability that comes with it - on the parties. Parties to a horizontal transaction should be especially cautious in order to avoid incurring significant antitrust liability.

Counselling on the appropriate bounds of information exchange and coordination between competing parties that wish to merge or act in a joint venture can be challenging for antitrust practitioners. Due to high levels of confusion, a lack of case law and the need for accurate advice, over the past few months the Antitrust Authority and the appellate court have provided some practical guidelines on this matter.

The food sector is facing radical new legislation aimed at increasing competition between food suppliers and among supermarkets. The proposed legislation will prohibit practices that could arguably be used by dominant suppliers to block expansion of smaller rivals, and empower the Antitrust Authority to order dominant retailers to divest existing supermarkets and ban their growth in certain locations.

The Antitrust Authority recently released its draft Antitrust Rules (Block Exemption for Non-horizontal Arrangements Without Price Restrictions). It is hoped that this draft exemption will herald a significant change in the way in which the Restrictive Trade Practices Law is enforced in relation to restrictive arrangements. At present, most restrictive arrangements require a specific exemption from the antitrust commissioner.

Parliament recently approved a legislative amendment to the 1988 Restrictive Trade Practices Act. The amendment will enable the antitrust commissioner to impose significant monetary payments unilaterally. This amendment is expected to increase the Antitrust Authority's enforcement powers significantly with regard to offences that are not hardcore cartel and bid-rigging violations.

During the past year, the Israeli antitrust regime has been undergoing near-constant change. Several governmental committees have been formed and a new antitrust commissioner has been appointed. There are early indications that the political, legal and personal changes that have occurred will lead to significant changes in the Israeli Antitrust Authority's enforcement policy.

The Israeli Parliament recently enacted a major reform of the Restrictive Trade Practices Law. The amendment provides the antitrust commissioner with new enforcement powers in an attempt to address the challenges posed by markets that demonstrate a tendency towards oligopolistic equilibrium. The amendment represents a major change in Israeli antitrust law and stands out from a global antitrust perspective.

The Antitrust Tribunal recently clarified the extraterritorial application of trade practices law. It based its decision on the effects doctrine, applying antitrust laws to offshore arrangements that may adversely affect competition in a local jurisdiction. In so doing, like many practitioners, the court ignored the previous Magrizo decision. It is likely that the effects doctrine will be the prevailing legal standard going forward.

Two of Israel's leading shopping centre firms recently announced their plan to merge. The Antitrust Authority reviewed the merger, which would create Israel's largest shopping centre firm, and approved it earlier this year, subject to the divestment of several shopping centres to a third party. The decision affords vital insight into how the authority treats 'two-sided platform' markets.

The Israeli Parliament recently repealed the longstanding statutory exemption for agreements held between shipping carriers, thereby subjecting such arrangements to possible antitrust scrutiny under the Restrictive Trade Practices Act 1988. The amendment may have far-reaching implications for the shipping industry in general and for foreign shipping carriers in particular.

While the Israeli Antitrust Authority (IAA) has been empowered to arrest suspects in antitrust investigations for years now, it had never made use of this power until recently. In the past, the IAA detained suspects for questioning, releasing them (sometimes subject to bail) after several hours of intense interrogation. Two recent cartel investigations in the bakeries market and the water counters segment mark a possible change to this policy.

The Antitrust Court recently issued a ruling upholding an Antitrust Authority decision that Bezeq, Israel's leading telecommunications company, had abused its dominant position by failing to take diligent measures to prevent potential harm to its competitors caused by a strike of its employees.

The Supreme Court recently issued a ruling upholding an Antitrust Authority decision to block a merger in the telecommunications industry due to potential competition concerns. The new ruling, which reversed the Antitrust Court's previous decision to clear the merger, provides important guidance on the implementation of the 'potential competition doctrine', particularly in the telecommunications markets.

The antitrust commissioner recently made a declaratory decision pursuant to Section 43(a)(1) of the Antitrust Law, according to which information exchanges concerning fees that were allegedly held between five major banks in Israel constituted an illegal restrictive arrangement. The decision seems to apply an 'illegal per-se' approach to information exchanges made in oligopolistic markets.

Mergers that meet certain threshold requirements are subject to a mandatory pre-notification process and require approval from the antitrust commissioner. In 2006 the commissioner blocked a transaction planned by Israel's leading telecommunications firm on account of it eliminating a potential source of competition in the market. The Antitrust Court recently overturned this decision.

The antitrust commissioner has the power to request any information that it deems necessary for the proper implementation of the Antitrust Law. A recent decision gives important guidance on the application of the Freedom of Information Act to sensitive business data submitted by firms to the Antitrust Authority through notification forms, responses to data requests or voluntary submissions.

In 2006 Parliament amended the antitrust law and annulled the antitrust immunity that had been granted to agreements between air carriers. When the amendment comes into effect, almost all air carrier agreements will become subject to licensing requirements. To avoid these requirements, the antitrust commissioner recently published the Block Exemption for Agreements between Air Carriers.

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